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EMPLOYERS INS. OF WAUSAU v. CLINTON

March 4, 1994

EMPLOYERS INSURANCE OF WAUSAU, A MUTUAL COMPANY, a mutual insurance corporation, Plaintiff,
v.
WILLIAM J. CLINTON, in his official capacity as President of the United States, et al., Defendants.



The opinion of the court was delivered by: MARVIN E. ASPEN

 MARVIN E. ASPEN, District Judge:

 Plaintiff Employers Insurance of Wausau brings this three count action to recover the funds that it expended cleaning up a contaminated oil recycling facility in Romulus, Michigan. Presently before the court is defendants' *fn1" motions for summary judgment and a protective order. For the reasons set forth below, defendants' motion for summary judgment is granted and motion for a protective order is denied as moot.

 Factual Background *fn2"

 On August 24, 1987, fire struck and destroyed a building located in Wyandotte, Michigan. The building's occupant held a policy with plaintiff Employers Insurance of Wausau ("Wausau"), which covered certain perils, including fire, as well as the expense of debris removal resulting from such perils. At the Wyandotte property, this debris included several electrical transformers. In a settlement with the policyholder, Wausau agreed to have certain fluids and oils drained from the transformers and removed from the site. In April, 1989, seven hundred gallons of fluids were removed from the transformers and transported to an oil recycling facility in Romulus, Michigan, where the fluids were placed in process tanks for recycling.

 The following month, it was discovered that the Romulus facility was contaminated with polychlorinated biphenyls ("PCBs") *fn3" and volatile organic compounds ("VOCs"). *fn4" The source of the PCB contamination was traced to the oil which had been used in the transformers at the Wyandotte building. On September 11, 1989, the Environmental Protection Agency ("EPA") designated Wausau as a potentially responsible party under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), as amended by the Superfund Amendments and Reauthorization Act of 1986 ("SARA"), 42 U.S.C. § 9601 et seq., *fn5" and demanded Wausau's participation in the cleanup. Wausau did not respond, and in November, 1989, the EPA issued a unilateral administrative order directing Wausau and the other involved parties to begin emergency cleanup measures. Wausau strenuously objected, claiming that the EPA's characterization of Wausau's role in the transportation and disposal of the fluids was "materially incorrect," "erroneous, arbitrary and wrongful." After some further wrangling, the EPA filed an administrative action against Wausau under the Toxic Substance Control Act, 15 U.S.C. § 2601 et seq., in an effort to force Wausau to comply with the order. Without admitting any responsibility, Wausau relented and submitted an Emergency Response Action Plan ("ERAP"), setting forth the manner in which it would comply with the order. The EPA approved Wausau's ERAP on February 26, 1990.

 The Order itself listed thirty-three findings which detailed the various parties' involvement in the PCB contamination at the Romulus facility. It further specified that "hazardous substances" were present at the site, both due to the PCB contamination and because there existed waste in drums which contained high levels of VOCs. Accordingly, the Order required the potentially responsible parties to:

 
a. Provide site security and develop and implement a site safety plan.
 
b. Pump, treat, test, and discharge contaminated water as necessary.
 
c. Pump and consolidate all contaminated oils and incinerate them off site.
 
d. Pump out sludges and dispose of them properly.
 
e. Excavate contaminated soils and dispose of them properly.
 
f. Pump and treat liquids in the dikes on site.
 
g. Treat lagoon water and discharge.
 
h. Sample, characterize, and dispose of drums of waste on site.
 
i. Conduct post cleanup sampling.

 In addition, the order specified requirements for the disposal and treatment of "all materials containing hazardous substance, pollutants or contaminants removed pursuant to this Order." These requirements of the Order were not limited to PCB-contaminated areas.

 The ERAP, drafted by Wausau and approved by the EPA, was expressly designed to "comply with the Order to the extent technically feasible under climatic conditions existing at the Site. . . ." The ERAP is somewhat more PCB specific, setting forth particular requirements with respect to PCB contamination. However, it also contains several broad statements about Wausau's obligations at the Site. These statements include:

 
Forty-eight drums are reportedly located at the Site. Immediately following or concurrent with tank sampling, samples will be collected from each drum . . . . The objective of drum sampling and analysis is to ascertain the compatibility of the drum contents and to characterize compatible waste streams to the extent necessary for ultimate treatment and/or disposal. Once compatible waste groups have been identified, representative composite samples will be generated in the laboratory for waste characterization testing.
 
. . . .
 
Surface water bodies on Site will be sampled, in accordance with the Sampling and Analysis Plan. Each discrete surface water body will be sampled immediately following ...

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